The right to export. Small-scale LNG plants want to break into the global market

Marcel Salikhov, President of the Institute for Energy and Finance, commented to Mash News on the prospects for the small-tonnage LNG market.

Small Russian producers of liquefied natural gas (LNG) are asking Prime Minister Mishustin to lift their export ban. They want to enter international markets directly and trade there on a par with such giants as Gazprom and NOVATEK. The government has other plans.

Marcel Salikhov is skeptical about the prospects for direct export supplies of LNG from small-scale plants.

“In terms of cost, large-capacity plants are more efficient than small ones. Therefore, not only in Russia, but throughout the world (in Qatar, the USA, Australia), large plants worth $10, 15, 20 billion dominate. They are the main drivers of the industry and customers of equipment for industry. It is clear that in our country now there is a question about the monetization of free gas resources and the use of excess capacity. But even in the current conditions, the stake on small-scale plants that will develop domestic industry with the help of exports, in my opinion, is not entirely justified. These enterprises solve local problems," he told MASHNEWS.

Another thing is the liberalization of LNG exports. According to Marcel Salikhov, there should be more players on the market who would be able to build factories "for export".

“At the same time, it is necessary to make systemic decisions, and not to determine exporters “on a geographical basis”, in fact, giving preference to specific companies. This is simply wrong from the point of view of the general principles of tax legislation,” the expert says.

Marcel Salikhov proposes to use financial and production criteria to determine LNG exporters. "Let's say such an enterprise should invest at least 100 billion rubles in production and build a plant with a capacity of at least 10 million tons of LNG per year within five years," Salikhov notes.